Guaranties: READ CAREFULLY BEFORE SIGNING

I routinely meet clients that have placed a parent in the nursing home and are having trouble completing the Medicaid application process.  While examining the paperwork, I often find that the son or daughter has signed all paperwork that was presented to him or her – including a guaranty that the son or daughter would personally pay for the nursing home care if necessary.  When I ask why the client did this, inevitably, I hear the response that the client didn’t know that he or she signed such a thing.  Paperwork was shoved at him or her and the client signed where told to sign.  As you can imagine, a guaranty raises an entirely new set of problems for the client. 

The purpose of this article is to educate the public so this mistake does not occur.  It is against both federal and state law for a nursing home to require a third party to sign a guaranty for payment.  Let me repeat, it is against federal and state law.  Why does it happen so often?  Because if the third person willingly agrees to be a guaranty, it is not against the law.  It is only against the law to refuse to admit the elderly person if a third person is required to sign as a guaranty for admission.  What happens is the son or daughter voluntarily agrees when signing all of the paperwork “shoved” in front of him or her.  Of course, an argument can be made that it wasn’t voluntary, but who wants to make that argument when the situation can be prevented.

Anyone signing the elderly person into the nursing home needs to carefully read the documents before signing.  Do not believe what you are told about the documents.  Read them for yourself.  When you run across a document stating that you will personally guarantee payment, refuse to sign it, unless you really are willing to guarantee the payment.  If told that it is a requirement, you should immediately contact a lawyer and tell the staff that you are doing so.  The staff assisting you may not know the law; but, the director of the nursing home will (or should) be aware that a guaranty cannot be a requirement of admission.    

However, the best course of action is to consult a lawyer before attempting to admit the elderly person in the nursing home.  While it may seem like this would be more expensive than to do it yourself, my experience has been that clients ultimately save money by getting legal assistance at the beginning of the process. 

Melanie B. Bradford is an attorney focusing her law practice on elder law matters for clients in Northeast Alabama.  Articles are based on Alabama law.

This article is written for educational purposes only and is not to be regarded as legal advice.  Every situation is different and legal advice will only be given by Melanie Bradford after consulting with a client and learning all circumstances surrounding the client’s situation.  If you feel you need legal assistance, please feel free to contact Melanie Bradford. 

Alabama State Bar regulations require the following on all attorney advertisements: “No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers.”